Basslink mulls exit from telecomms business

Cable ship costs are staggering

Tasmania's telco woes could get even worse, with Basslink's boss hinting that the company might exit the telecommunications business.

The problem is the truly staggering price of the cable ship needed to repair the cable, which is running to around AU$100,000 a day. By the time the cable is repaired, Basslink will have racked up many millions that it has to recover somehow.

Some of that, CEO Malcolm Eccles says, will have to come from telecommunications customers. He told the Australian Broadcasting Corporation's Damian McIntyre in Launceston that “the moment it [Basslink] becomes unviable...then it would be unfair to our shareholders to actually continue”.

The question of viability is one reason Tasmanian customers of TPG's internet service provider brands like iiNet and Internode are suffering poor performance, he said.

Eccles claimed that Basslink approached Telstra to purchase capacity to cover its customer requirements, but that Telstra's terms were “completely uncommercial”.

Eccles also complained that end users don't seem to understand that a submarine cable is much more expensive than any land-based infrastructure.

An exit would be regarded as catastrophic for Tasmanian Internet customers, since it would eliminate the only competition to Telstra on the route. That might mean the threat to withdraw from the market is a play for the Tasmanian government to pitch in.

There's no word yet on how long the cable repair will take. The cable ship Ile de Re is currently in harbour but will be setting off soon to look for a break somewhere along the 98 km of cable between the first cut (made during the weekend) and the Tasmanian coast.

The Ile de Re is now waiting for the right weather to lift the cable onto the back of the ship and work out the distance to the break. ®